29 July 2020

REN maintains quality of service in a semester with EBITDA falling close to 4%

REN - Redes Energéticas Nacionais ended the first half of 2020 with a net profit of 46.1 million euros, a decrease of 5 million euros (- 9.8%) compared to the same period in 2019, remaining penalised by the Extraordinary Contribution for the Energy Sector, whose effective tax rate is 37.3%. Financial results improved by 5.4 million euros (20.2%) to - 21.4 million euros, sustained by the lower average cost of debt (1.9% versus 2.2%).

In the first half of 2020, EBITDA decreased by 10.3 million euros (- 4.2%), to 237.0 million euros, mainly due to the reduction in the value of asset remuneration rates (- 9.8 million euros) resulting from lower sovereign bonds, the new regulatory framework for gas, and the higher OPEX contribution (6.9 million euros). In contrast, EBITDA benefited from REN's business in Chile, which was 3.4 million euros higher than the one in the same period last year, with the introduction of Transemel in the accounts.

CAPEX reached 60.6 million euros (+ 10.7 million euros), 75% of which is related to the electricity business, while transfers to gross annual income fell 40.3 million euros to 9.6 million euros.

Due to the COVID-19 crisis, on 13 May ERSE approved the extraordinary extension to 2021 of the 2018-2020 regulation period for the electricity sector.

Decline in electricity and gas consumption

Operationally, the first half of the year was inevitably affected by the pandemic. The consumption of electricity saw a negative variation of 5.1%, or 5.2%, when correcting for temperature and working days. The consumption of electricity in the first half of 2020 was, moreover, the lowest since 2004.

In the same period, renewable production supplied 65% of consumption, broken down into hydropower with 31%, wind-power with 24%, biomass with 7% and photovoltaics with 2.5%. Non-renewable production supplied 29% of the consumption, with natural gas accounting for the most part, since coal production was of no significance. The foreign trade balance favoured imports, amounting to around 6% of the domestic consumption.

By the end of the first half, natural gas consumption had fallen (- 5.4%), with the conventional segment shrinking 9.4% despite the 4.9% growth in the power production segment.

In June, REN carried out the first issuance of Guarantees of Origin, which certify electricity produced in Portugal from renewable energy sources (at the time, over 150 companies applied for registration). REN has also joined the Association of Issuing Bodies (AIB), an institution that gathers all European entities responsible for green energy certificates.

At the end of the first quarter, in the wake of the declaration of the state of emergency due to the COVID-19 pandemic, REN implemented its contingency plan, which remains in force, in line with the guidelines from the Directorate-General of Health. Aware of the difficult time the country is going through, the company has been working non-stop to safeguard the management of the critical operations under its responsibility, while never putting the safety of its employees at risk. As a result of the work the teams have done, there was no impact in the energy supply assigned to REN throughout this extraordinary period.

After the end of the first half, REN integrated the H2 Sines consortium along with other national companies. The consortium aims to assess the feasibility of creating a green hydrogen production centre in Sines, as part of the National Strategy for Hydrogen.


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